Ovalseal Limited - Limited company accounts 18.2

REGISTERED NUMBER: 02358974 (England and Wales)

Ovalseal Limited

Group Strategic Report, Report of the Director and

Consolidated Financial Statements

For The Year Ended 31 March 2019

Page

Company Information

1

Group Strategic Report

2

Report of the Director

4

Report of the Independent Auditors

6

Consolidated Statement of Comprehensive Income

8

Consolidated Statement of Financial Position

9

Company Statement of Financial Position

10

Consolidated Statement of Changes in Equity

11

Company Statement of Changes in Equity

12

Consolidated Statement of Cash Flows

13

Notes to the Consolidated Statement of Cash Flows

14

Notes to the Consolidated Financial Statements

15

DIRECTOR:

Mr M D Hartey

SECRETARY:

Randomlight Limited

REGISTERED OFFICE:

6 - 8 Old Hall Road

Gatley

Cheadle

Cheshire

SK8 4BE

REGISTERED NUMBER:

02358974 (England and Wales)

AUDITORS:

Lloyd Piggott Limited

Chartered Accountants and Statutory Auditor

St George's House

56 Peter Street

Manchester

M2 3NQ

The director presents his strategic report of the company and the group for the year ended 31 March 2019.

REVIEW OF BUSINESS

The group continued its principal activities throughout the current year as detailed in the Report of the Director.

As reported in the profit and loss account, revenue has shown an increase of 4.8% from £12,861,079 to £13,473,361 in

the current period. Profit after tax has decreased from £1,283,210 to £1,149,571.

The increase in turnover is due to the acquisition of St Nicholas Nursing Home. Profit after tax has fallen due to the

increase in Head Office costs as a result of the expansion of the business.

Financial position at the reporting date

The balance sheet shows that the group's net assets at the year-end have increased from £14,737,788 to £15,857,359.

This is due to the profit in the year.

PRINCIPAL RISKS AND UNCERTAINTIES

The director considers the key risks and uncertainties facing the group to be as follows:

Competitive pressure in a market for specialist challenging behaviour services is a continuing risk for the company as a

number of alternative providers exist across the UK. The group continues to mitigate for this risk by developing services

which are sufficiently differentiated from the competition by means of both the behavioural models applied and the

niche client groups cared for by the group.

The service users are wholly funded by public sector sources. Consequently the group is therefore exposed to risks

surrounding changes in government policies and the impact of enacted and planned reductions in spending on health and

social care. This risk is mitigated by providing robust evidence of quality and service user outcomes, as well as ensuring

that the group continues to contract with a wide range of funding providers. The group will continue to review and

amend its cost base to counteract funding changes.

The director has considered the company's trading and cash flows for the foreseeable future and is confident that the

company does have adequate resources to continue in operational existence for the foreseeable future. Accordingly, the

company continues to adopt the going concern basis in preparing the annual report and financial statements.

FINANCIAL KEY PERFORMANCE INDICATORS

Management monitor cash balances throughout the year as key performance indicators.

2019

2018

£

£

Cash at bank

543,175

1,303,841

EBITDAR

2,329,553

2,483,810

FUTURE DEVELOPMENT

The group's strategy is to continually improve the quality of the services provided and to increase its capacity. This will

be delivered through:

- Investment into the development of clinical and management teams;

- development of new properties;

- refurbishment of existing properties; and

- strategic acquisitions.

ON BEHALF OF THE BOARD:

Mr M D Hartey - Director

24 October 2019

The director presents his report with the financial statements of the company and the group for the year ended

31 March 2019.

PRINCIPAL ACTIVITIES

The principal activities of the group in the year under review were those of the provision of specialist healthcare services

and trading in antiques.

DIVIDENDS

No interim dividend was paid during the year. The director recommends a final dividend of £15,000 per share.

The total distribution of dividends for the year ended 31 March 2019 will be £ 30,000 .

FUTURE DEVELOPMENTS

Information regarding the future developments of the group can be found in the strategic report.

DIRECTOR

Mr M D Hartey held office during the whole of the period from 1 April 2018 to the date of this report.

FINANCIAL INSTRUMENTS

The group seeks to operate within its agreed overdraft facility with the bank. All sales are to UK customers and the

majority of suppliers are UK based; the company has therefore not entered into any hedging arrangements in respect of

risks relating to trade debtors or trade creditors.

The group currently utilises loans and overdrafts facilities from the bank, and therefore has a cash flow and liquidity

risk. The bank is currently satisfied with the group's financial performance and the director does not think there is any

risk of facilities being withdrawn.

EMPLOYMENT OF DISABLED PERSONS

The group's policy is to give full and fair consideration to applications for employment made by disabled persons,

having regard to their particular aptitudes and abilities.

Disabled employees receive appropriate training to promote their career development within the group. Employees who

become disabled are retained in their existing posts where possible or retained for suitable alternative posts.

EMPLOYEE INVOLVEMENT

Regular meetings are held between senior management and employee representatives to discuss matters of concern.

Employees are kept well-informed about the progress and position of the group by means of regular meetings.

STATEMENT OF DIRECTOR'S RESPONSIBILITIES

The director is responsible for preparing the Group Strategic Report, the Report of the Director and the financial

statements in accordance with applicable law and regulations.

Company law requires the director to prepare financial statements for each financial year. Under that law the director

has elected to prepare the financial statements in accordance with United Kingdom Generally Accepted Accounting

Practice (United Kingdom Accounting Standards and applicable law), including Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland'. Under company law the director must not

approve the financial statements unless he is satisfied that they give a true and fair view of the state of affairs of the

company and the group and of the profit or loss of the group for that period. In preparing these financial statements, the

director is required to:

-	select suitable accounting policies and then apply them consistently;

-	make judgements and accounting estimates that are reasonable and prudent;

-	state whether applicable accounting standards have been followed, subject to any material departures disclosed and explained in the financial statements;

-	prepare the financial statements on the going concern basis unless it is inappropriate to presume that the company will continue in business.

The director is responsible for keeping adequate accounting records that are sufficient to show and explain the

company's and the group's transactions and disclose with reasonable accuracy at any time the financial position of the

company and the group and enable him to ensure that the financial statements comply with the Companies Act 2006. He

is also responsible for safeguarding the assets of the company and the group and hence for taking reasonable steps for

the prevention and detection of fraud and other irregularities.

STATEMENT AS TO DISCLOSURE OF INFORMATION TO AUDITORS

So far as the director is aware, there is no relevant audit information (as defined by Section 418 of the Companies Act

2006) of which the group's auditors are unaware, and he has taken all the steps that he ought to have taken as a director

in order to make himself aware of any relevant audit information and to establish that the group's auditors are aware of

that information.

AUDITORS

The auditors, Lloyd Piggott Limited, will be proposed for re-appointment at the forthcoming Annual General Meeting.

ON BEHALF OF THE BOARD:

Mr M D Hartey - Director

24 October 2019

Opinion

We have audited the financial statements of Ovalseal Limited (the 'parent company') and its subsidiaries (the 'group') for

the year ended 31 March 2019 which comprise the Consolidated Statement of Comprehensive Income, Consolidated

Statement of Financial Position, Company Statement of Financial Position, Consolidated Statement of Changes in

Equity, Company Statement of Changes in Equity, Consolidated Statement of Cash Flows and Notes to the Consolidated

Statement of Cash Flows, Notes to the Financial Statements, including a summary of significant accounting policies. The

financial reporting framework that has been applied in their preparation is applicable law and United Kingdom

Accounting Standards, including Financial Reporting Standard 102 'The Financial Reporting Standard applicable in the

UK and Republic of Ireland' (United Kingdom Generally Accepted Accounting Practice).

In our opinion the financial statements:

-	give a true and fair view of the state of the group's and of the parent company affairs as at 31 March 2019 and of the group's profit for the year then ended;

-	have been properly prepared in accordance with United Kingdom Generally Accepted Accounting Practice; and

-	have been prepared in accordance with the requirements of the Companies Act 2006.

Basis for opinion

We conducted our audit in accordance with International Standards on Auditing (UK) (ISAs (UK)) and applicable law.

Our responsibilities under those standards are further described in the Auditors' responsibilities for the audit of the

financial statements section of our report. We are independent of the group in accordance with the ethical requirements

that are relevant to our audit of the financial statements in the UK, including the FRC's Ethical Standard, and we have

fulfilled our other ethical responsibilities in accordance with these requirements. We believe that the audit evidence we

have obtained is sufficient and appropriate to provide a basis for our opinion.

Conclusions relating to going concern

We have nothing to report in respect of the following matters in relation to which the ISAs (UK) require us to report to

you where:

-	the director's use of the going concern basis of accounting in the preparation of the financial statements is not appropriate; or

-

the director has not disclosed in the financial statements any identified material uncertainties that may cast significant doubt about the group's ability to continue to adopt the going concern basis of accounting for a period of at least twelve months from the date when the financial statements are authorised for issue.

Other information

The director is responsible for the other information. The other information comprises the information in the Group

Strategic Report and the Report of the Director, but does not include the financial statements and our Report of the

Auditors thereon.

Our opinion on the financial statements does not cover the other information and, except to the extent otherwise

explicitly stated in our report, we do not express any form of assurance conclusion thereon.

In connection with our audit of the financial statements, our responsibility is to read the other information and, in doing

so, consider whether the other information is materially inconsistent with the financial statements or our knowledge

obtained in the audit or otherwise appears to be materially misstated. If we identify such material inconsistencies or

apparent material misstatements, we are required to determine whether there is a material misstatement in the financial

statements or a material misstatement of the other information. If, based on the work we have performed, we conclude

that there is a material misstatement of this other information, we are required to report that fact. We have nothing to

report in this regard.

Opinions on other matters prescribed by the Companies Act 2006

In our opinion, based on the work undertaken in the course of the audit:

-	the information given in the Group Strategic Report and the Report of the Director for the financial year for which the financial statements are prepared is consistent with the financial statements; and

-	the Group Strategic Report and the Report of the Director have been prepared in accordance with applicable legal requirements.

Matters on which we are required to report by exception

In the light of the knowledge and understanding of the group and the parent company and its environment obtained in the

course of the audit, we have not identified material misstatements in the Group Strategic Report or the Report of the

Director.

We have nothing to report in respect of the following matters where the Companies Act 2006 requires us to report to you

if, in our opinion:

-	adequate accounting records have not been kept by the parent company, or returns adequate for our audit have not been received from branches not visited by us; or

-	the parent company financial statements are not in agreement with the accounting records and returns; or

-	certain disclosures of director's remuneration specified by law are not made; or

-	we have not received all the information and explanations we require for our audit.

Responsibilities of director

As explained more fully in the Statement of Director's Responsibilities set out on pages four and five, the director is

responsible for the preparation of the financial statements and for being satisfied that they give a true and fair view, and

for such internal control as the director determines necessary to enable the preparation of financial statements that are

free from material misstatement, whether due to fraud or error.

In preparing the financial statements, the director is responsible for assessing the group's and the parent company's

ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going

concern basis of accounting unless the director either intends to liquidate the group or the parent company or to cease

operations, or has no realistic alternative but to do so.

Auditors' responsibilities for the audit of the financial statements

Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from

material misstatement, whether due to fraud or error, and to issue a Report of the Auditors that includes our opinion.

Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with ISAs

(UK) will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are

considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic

decisions of users taken on the basis of these financial statements.

A further description of our responsibilities for the audit of the financial statements is located on the Financial Reporting

Council's website at www.frc.org.uk/auditorsresponsibilities. This description forms part of our Report of the Auditors.

Use of our report

This report is made solely to the company's members, as a body, in accordance with Chapter 3 of Part 16 of the

Companies Act 2006. Our audit work has been undertaken so that we might state to the company's members those

matters we are required to state to them in a Report of the Auditors and for no other purpose. To the fullest extent

permitted by law, we do not accept or assume responsibility to anyone other than the company and the company's

members as a body, for our audit work, for this report, or for the opinions we have formed.

Susan Redmond ACA (Senior Statutory Auditor)

for and on behalf of Lloyd Piggott Limited

Chartered Accountants and Statutory Auditor

St George's House

56 Peter Street

Manchester

M2 3NQ

13 November 2019

TURNOVER

3

13,473,361

12,861,079

Cost of sales

4,306

-

GROSS PROFIT

13,469,055

12,861,079

Administrative expenses

11,638,433

11,096,795

1,830,622

1,764,284

Other operating income

42,759

213,175

OPERATING PROFIT

5

1,873,381

1,977,459

Interest receivable and similar income

31

381

1,873,412

1,977,840

Interest payable and similar expenses

6

411,844

329,579

PROFIT BEFORE TAXATION

1,461,568

1,648,261

Tax on profit

7

311,997

365,051

PROFIT FOR THE FINANCIAL YEAR

1,149,571

1,283,210

OTHER COMPREHENSIVE INCOME

-

-

TOTAL COMPREHENSIVE INCOME FOR THE YEAR

1,149,571

1,283,210

Profit attributable to:

Owners of the parent

1,149,571

1,283,210

Total comprehensive income attributable to:

Owners of the parent

1,149,571

1,283,210

FIXED ASSETS

Intangible assets

10

593,212

814,237

Tangible assets

11

22,495,241

19,303,341

Investments

12

-

-

23,088,453

20,117,578

CURRENT ASSETS

Stocks

13

11,377,937

9,968,026

Debtors

14

1,620,274

1,493,527

Cash at bank and in hand

543,175

1,303,841

13,541,386

12,765,394

CREDITORS

Amounts falling due within one year

15

4,054,847

4,159,301

NET CURRENT ASSETS

9,486,539

8,606,093

TOTAL ASSETS LESS CURRENT LIABILITIES

32,574,992

28,723,671

CREDITORS

Amounts falling due after more than one year

16

(16,566,775

)

(13,838,285

)

PROVISIONS FOR LIABILITIES

21

(150,858

)

(147,598

)

NET ASSETS

15,857,359

14,737,788

CAPITAL AND RESERVES

Called up share capital

22

2

2

Revaluation reserve

23

172,000

172,000

Retained earnings

23

15,685,357

14,565,786

SHAREHOLDERS' FUNDS

15,857,359

14,737,788

The financial statements were approved by the director on 24 October 2019 and were signed by:

Mr M D Hartey - Director

FIXED ASSETS

Intangible assets

10

-

-

Tangible assets

11

5,000

5,000

Investments

12

25,004

25,004

30,004

30,004

CURRENT ASSETS

Debtors

14

413,220

265,452

CREDITORS

Amounts falling due within one year

15

257,768

110,000

NET CURRENT ASSETS

155,452

155,452

TOTAL ASSETS LESS CURRENT LIABILITIES

185,456

185,456

CAPITAL AND RESERVES

Called up share capital

22

2

2

Retained earnings

23

185,454

185,454

SHAREHOLDERS' FUNDS

185,456

185,456

Company's profit for the financial year

30,000

30,000

The financial statements were approved by the director on 24 October 2019 and were signed by:

Mr M D Hartey - Director

Called up

share

Retained

Revaluation

Total

capital

earnings

reserve

equity

£

£

£

£

Balance at 1 April 2017

2

13,312,576

172,000

13,484,578

Changes in equity

Dividends

-

(30,000

)

-

(30,000

)

Total comprehensive income

-

1,283,210

-

1,283,210

Balance at 31 March 2018

2

14,565,786

172,000

14,737,788

Changes in equity

Dividends

-

(30,000

)

-

(30,000

)

Total comprehensive income

-

1,149,571

-

1,149,571

Balance at 31 March 2019

2

15,685,357

172,000

15,857,359

Called up

share

Retained

Total

capital

earnings

equity

£

£

£

Balance at 1 April 2017

2

185,454

185,456

Changes in equity

Dividends

-

(30,000

)

(30,000

)

Total comprehensive income

-

30,000

30,000

Balance at 31 March 2018

2

185,454

185,456

Changes in equity

Dividends

-

(30,000

)

(30,000

)

Total comprehensive income

-

30,000

30,000

Balance at 31 March 2019

2

185,454

185,456

Cash flows from operating activities

Cash generated from operations

1

1,075,306

2,745,463

Interest paid

(411,844

)

(329,579

)

Tax paid

(348,768

)

(169,313

)

Net cash from operating activities

314,694

2,246,571

Cash flows from investing activities

Purchase of intangible fixed assets

-

286,974

Purchase of tangible fixed assets

(4,259,452

)

(3,657,078

)

Sale of tangible fixed assets

832,752

1,570,676

Interest received

31

381

Net cash from investing activities

(3,426,669

)

(1,799,047

)

Cash flows from financing activities

New loans in year

3,600,000

400,000

Loan repayments in year

(676,015

)

(570,031

)

Amount introduced by directors

45,000

30,000

Amount withdrawn by directors

(38,058

)

(192,049

)

Equity dividends paid

(30,000

)

(30,000

)

Net cash from financing activities

2,900,927

(362,080

)

(Decrease)/increase in cash and cash equivalents

(211,048

)

85,444

Cash and cash equivalents at beginning of year

2

754,223

668,779

Cash and cash equivalents at end of year

2

543,175

754,223

1.	RECONCILIATION OF PROFIT BEFORE TAXATION TO CASH GENERATED FROM OPERATIONS

2019

2018

£

£

Profit before taxation

1,461,568

1,648,261

Depreciation charges

456,114

509,667

(Profit)/loss on disposal of fixed assets

(289

)

225,041

Increase/(decrease) in provision

6,057

(5,025

)

Finance costs

411,844

329,579

Finance income

(31

)

(381

)

2,335,263

2,707,142

Increase in stocks

(1,409,911

)

(538,359

)

Increase in trade and other debtors

(126,747

)

(263,740

)

Increase in trade and other creditors

276,701

840,420

Cash generated from operations

1,075,306

2,745,463

2.	CASH AND CASH EQUIVALENTS

The amounts disclosed on the Statement of Cash Flows in respect of cash and cash equivalents are in respect of

these Statement of Financial Position amounts:

Year ended 31 March 2019

31.3.19

1.4.18

£

£

Cash and cash equivalents

543,175

1,303,841

Bank overdrafts

-

(549,618

)

543,175

754,223

Year ended 31 March 2018

31.3.18

1.4.17

£

£

Cash and cash equivalents

1,303,841

1,423,366

Bank overdrafts

(549,618

)

(754,587

)

754,223

668,779

1.	STATUTORY INFORMATION

Ovalseal Limited is a private company, limited by shares , registered in England and Wales. The company's

registered number and registered office address can be found on the General Information page.

The presentation currency of the financial statements is the Pound Sterling (£).

2.	ACCOUNTING POLICIES

Basis of preparing the financial statements

These financial statements have been prepared in accordance with Financial Reporting Standard 102 "The Financial Reporting Standard applicable in the UK and Republic of Ireland" and the Companies Act 2006. The financial statements have been prepared under the historical cost convention as modified by the revaluation of certain assets.

Basis of consolidation

The group financial statements consolidate the financial statements of the company and its subsidiary

undertakings drawn up to 31 March 2019.

Subsidiary undertakings are included using the acquisitions method of accounting. Under this method the group

profit and loss account and statement of cashflows include the results and cashflows of subsidiaries from the date

of acquisition and to the date of sale outside the group in the case of disposals of subsidiaries. The purchase

consideration has been allocated to the assets and liabilities on the basis of fair value at the date of acquisition.

No profit and loss account is presented for the company as permitted by Section 408 of the Companies Act 2006.

Related party exemption

The company has taken advantage of exemption, under the terms of Financial Reporting Standard 102 'The

Financial Reporting Standard applicable in the UK and Republic of Ireland', not to disclose related party

transactions with wholly owned subsidiaries within the group.

Transactions between group entities which have been eliminated on consolidation are not disclosed within the

financial statements.

During the year the group has paid rent of £15,000 to the director for use of assets.

Turnover

Income recognition, which is stated net of value added tax, is dependant upon the type of income concerned:

- The provision of care is recognised as it is earned on a periodic basis.

- Income from antiques is recognised at the point of sale.

- Consultancy income is recognised upon completion of services.

Goodwill

Positive goodwill arising on acquisitions is capitalised, classified as an asset on the balance sheet and amortised

on a straight line basis over its useful economic life up to a presumed maximum of 10 years. It is reviewed for

impairment at the end of the first full financial year following acquisition and in other periods if events or

changes in circumstances indicate that the carrying value may not be recoverable.

Intangible assets

Intangible assets are initially measured at cost. After initial recognition, intangible assets are measured at cost

less any accumulated amortisation and any accumulated impairment losses.

Tangible fixed assets

Depreciation is provided at the following annual rates in order to write off each asset over its estimated useful life.

Plant and machinery

-

25% on reducing balance and 25% on cost

Fixtures and fittings

-

33% on reducing balance, 25% on reducing balance, 20% on reducing balance and 15% on cost

Motor vehicles

-

25% on reducing balance

Computer equipment

-

33% on reducing balance and 25% on cost

No depreciation has been provided on the freehold buildings on the grounds that it would be immaterial as the

estimated remaining useful economic life of the buildings exceed 50 years and the buildings have high residual

values.

Stocks

Stocks are valued at the lower of cost and net realisable value, after making due allowance for obsolete and slow

moving items.

Taxation

Taxation for the year comprises current and deferred tax. Tax is recognised in the Consolidated Statement of

Comprehensive Income, except to the extent that it relates to items recognised in other comprehensive income or

directly in equity.

Current or deferred taxation assets and liabilities are not discounted.

Current tax is recognised at the amount of tax payable using the tax rates and laws that have been enacted or

substantively enacted by the statement of financial position date.

Deferred tax

Deferred tax is recognised in respect of all timing differences that have originated but not reversed at the

statement of financial position date.

Timing differences arise from the inclusion of income and expenses in tax assessments in periods different from

those in which they are recognised in financial statements. Deferred tax is measured using tax rates and laws that

have been enacted or substantively enacted by the year end and that are expected to apply to the reversal of the

timing difference.

Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that they

will be recovered against the reversal of deferred tax liabilities or other future taxable profits.

Foreign currencies

Assets and liabilities in foreign currencies are translated into sterling at the rates of exchange ruling at the

statement of financial position date. Transactions in foreign currencies are translated into sterling at the rate of

exchange ruling at the date of transaction. Exchange differences are taken into account in arriving at the

operating result.

Hire purchase and leasing commitments

Rentals paid under operating leases are charged to profit or loss on a straight line basis over the period of the

lease.

Pension costs and other post-retirement benefits

The group operates a defined contribution pension scheme. Contributions payable to the group's pension scheme

are charged to profit or loss in the period to which they relate.